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Life & Health Insurance/Life insurance claim question


Hi I just lost my dad and my sister and I are the beneficiaries. I want to know best way to claim mo money. I have the option to claim in one big sum of 50 thousand or an account I earn interest in or something? I dont understand these options . what is the best way to claim my money that will earn me the most interest? Please advise ty

If you don't need the money right away, you can leave it on deposit with the insurance company in an interest deposit account, which works like a negotiable order of withdrawal account at a bank. You can write checks on it, or take it all out at once, or leave it to draw interest. In an era of low interest rates, you may receive a higher interest rate on such an account, which is very safe though not FDIC insured, than you would at a bank or credit union.  On the other hand, if you carry any debt, the best use of the funds may be to pay off all or some of the debt, at a savings rate of whatever you are being charged for interest on the debt.  It's always a good idea to leave yourself some liquidity, in the form of a money market account or bank deposit account, for possible emergencies. In either event, lump sum or interest deposit account at the insurance company, you won't pay taxes on the death benefit itself. Any interest credited to you is of course taxable as income.

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Dave Bowman


I will answer questions of a general nature regarding life insurance, disability income insurance annuities (fixed and variable) and long term care insurance. Also, questions regarding estate analysis. No legal or accounting advice, as I am not a lawyer or a CPA. I do not sell health insurance, so have limited knowledge of the current status of that field.


30 years as a life insurance and investment industry professional. Former chapter president of Association of Insurance and Financial Advisors, Buffalo Chapter. CLU designation.

Association of Insurance and Financial Professionals.

B.B.A Economics, U. of Georgia, 1971.

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